SPY Trends And Influencers: May 4, 2013

As we head into May, last week’s review of the macro market indicators suggested that everyone is telling you to sell and go away, to look for Gold to stall in the bounce while Crude Oil continued higher. The U.S. dollar Index seemed content to move sideways again. U.S. Treasuries were biased higher, but might continue to consolidate. The Shanghai Composite was looking better to the downside, with Emerging Markets looking to consolidate. Volatility looked to remain a non-issue, keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. The reversal candlestick patterns at the end of the week suggested a pullback for the coming week. In the long term, the uptrends remained with the QQQ looking the strongest.

The week played out with Gold stalling at the falling 20 day Simple Moving Average (SMA), while Crude Oil met some resistance before finding a range around its SMAs. The U.S. dollar broke lower before a false pop Thursday, selling back Friday while Treasuries moved higher in a pennant before falling back to end the week. The Shanghai Composite did not do much in its shortened week, while Emerging Markets peeked higher over their recent range. Volatility drifted at recent lows before falling Friday. The Equity Index ETF’s drifted early in the week before rocketing higher after the Non-Farm Payroll report Friday made new all-time highs on the SPY and IWM, and 12 year highs on the QQQ. What does this mean for the coming week? Lets look at some charts.

SPY Daily, SPY


SPY Weekly, $SPY



The SPY completed a rather boring week with a major move higher Friday to new All -Time Highs. The candle print for Friday is a Hanging Man, a potential reversal signal if confirmed. Adding fuel to that side of the ledger, is that 161.37 is a near perfect 127% extension of the previous move higher from June through September. But the SPY is in an uptrend. All of the SMA’s are rising and below the price, the RSI on the daily chart is bullish and rising and so is the MACD. There is a Measured Move higher to 164.25, and 166.5-167 would continue the 6.5-7 point higher tops in the recent move from November. The weekly scenario shows a move higher off of the consolidation that followed the break of the rising wedge. The RSI on this timeframe is also bullish, technically overbought, but barely and running sideways with a rising MACD. There are some signs that raise caution, yes, but refer back to the bold line above. Support lower comes at 159.72 and 156.80, followed by 153.50. Continued Uptrend.

Heading into next week, look for Gold to continue its consolidation with a downside bias while Crude Oil works higher in the neutral zone. The U.S. Dollar Index looks better lower, while U.S. Treasuries are biased lower within the longer uptrend. The Shanghai Composite is at support, but looks better for a break lower while Emerging Markets are looking strong. Volatility looks to remain subdued, keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ, despite their moves higher to new highs. Their charts agree and point higher, but look better on the weekly timeframe as the daily views show some signs of being extended with Friday’s moves. Use this information as you prepare for the coming week and trad’em well.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

Original post